Spotify Technology it would cut 200 jobs from its podcast unit in its second round of layoffs, as the company restructures the business after years of heavy investment.
The move affects about 2% of the music-streaming giant’s workforce and aligns Spotify with the likes of Meta Platforms (META.O) and Roku (ROKU.O), which have also cut jobs for the second time in response to an uncertain economy.
Shares of the Sweden-based company rose about 0.5% in early trading, outperforming a muted broader market.
Spotify had spent aggressively to build up its podcast business in recent years, hoping the higher engagement levels offered by the format will bring in more advertisers.
But that led to a surge in the company’s operating expenditure, which grew at twice the speed of its revenue last year. Rising interest rates and high inflation mean that businesses have also been dialling back spending on ads.
In response, Spotify cut 6% of its workforce earlier in 2023 and announced the departure of Dawn Ostroff, who helped shape its podcast business and guided it through controversies such as the backlash around Joe Rogan’s show for allegedly spreading misinformation about COVID-19.
Sahar Elhabashi, who heads the podcast business, said on Monday that the company has “made the difficult but necessary decision to make a strategic realignment.”
Spotify also said it will merge its Parcast and Gimlet studios into a single Spotify Studios division, which will produce Spotify originals.
The company would now take a tailored approach for each show and creator, compared with the uniform approach followed previously, Elhabashi said.